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Kellogg's elves

Published on November 06, 2000.

If you phone an executive at Keebler Foods Co. and the executive is out, you'll get a voice mail message explaining that he or she is away from the "hollow tree." Silly? Sure. But that bit of silliness goes a long way toward explaining why Keebler's $3.6 billion purchase by Kellogg Co. was a very smart one.

The key to Keebler's success has been its single minded focus on its elf equity, and its ability to filter that equity through every marketing communication while at the same time executing it successfully at the store level. Although Keebler lacks the deep pockets of giant rival Nabisco -- soon to be owned by an even larger parent, Philip Morris Cos.' Kraft Foods -- Ernie & Co. has managed to make its mark through wise use of promotional dollars leveraged across its many brands.

Kellogg, by comparison, has had less snap, crackle and pop at the store level. Once the invincible giant of the cereal aisle, it's lost leadership to General Mills and is in need of diversifying into new categories. But some earlier Kellogg attempts, such as its wide-ranging Ensemble cholesterol-lowering food line, have failed to help it break down barriers. And, while Kellogg continues to come up with innovative products and promotions, some retailers are skeptical of its ability to carry them through. Even a Kellogg salesman admitted its upcoming promotion with Walt Disney Co., offering beanie characters in cereal boxes, "will be difficult to execute on the store level."

Follow-through, however, has never been a problem at the hollow tree. For Kellogg, that's gr-r-r-r-reat news.